Eurotunnel NYX listing brings competition to UK market, says exchange

Author: | Published: 5 Jul 2012
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Groupe Eurotunnel’s NYSE Euronext (NYX) London listing, the first-ever on this exchange, introduces much-needed competition in the UK capital markets, NYX London’s European head of client coverage and business development has said.

Marc Lefèvre told IFLR that issuers looking to list in London had historically lacked venue choice outside of the London Stock Exchange (LSE). Eurotunnel ‘s listing should demonstrate to international and domestic issuers that there are alternative platforms in the London market, he said.

Eurotunnel, the operator of the Channel Tunnel between England and France, announced its plans last month to switch its secondary listing from LSE to NYX London on July 19.

Eurotunnel’s group chairman and CEO Jacques Gounon said the transfer would enable the company to remain in London while connecting to the world’s largest exchange. Eurotunnel would benefit from the strength and visibility of NYSE’s global brand and have the possibility of accessing deeper liquidity across Europe.

Lefèvre said the move represented a rebirth of Eurotunnel’s London listing.

“It will enable the company to consolidate liquidity and give them access to the UK, Belgium, France, the Netherlands and Portugal via its listings under the one exchange umbrella,” he said.

But most importantly, it introduced much-needed choice into the market, he said.

“The NYSE is very competitive in other parts of the world and one of the elements of our plans in London is to introduce more competition in the market,” he said.

“Eurotunnel was dissatisfied with its LSE listing,” Lefèvre said. “By Eurotunnel moving its listing from the LSE, it now has a chance to see real value in its UK listing in a more harmonised way. It’s important to give issuers choice.”

NYX London growth plans

The listing also connects the continent with the UK, something the exchange had been trying to achieve for some time. “It is our aim to better develop listing and visibility in the UK for European issuers,” he said.

“We want to interact with and further connect the European and UK communities and bolster business with all stakeholders by positioning ourselves at the centre of an ecosystem we have developed,” he said.

Building a cross-Atlantic listing platform, linking the US and Europe, was a key element of this plan, he said.

“We are seeing a lot of interest in coming to London from Russian and Indian companies,” he said. “In Russia, in particular, there is a real need for financing and a real interest in listing in the UK. We hope to streamline this process for them.”

Bolstering business in Israel, Brazil, and the rest of Europe was also a focus for the exchange, he said.

The transfer process

NYX London worked very closely with Eurotunnel on its listing, Lefèvre said. “It takes time to explain a new value proposition such as this.”

“The process of transferring a listing is one with wide steps,” he said. “A lot of visibility will be offered to Groupe Eurotunnel.”

Gounon said drafting a summary document to meet the UK Listing Authority’s requirements for the transfer had proved technical. “But this is something we could carry out and release on time,” he said.

It is an important step in building the group’s visibility and profile in the UK market, as well as among UK investors and clients, he added.

Eurotunnel, which is a bi-national company, wanted to demonstrate to UK investors that the UK market is important to them, he said. “Roughly 65% of our investors are not French and most of the US funds prefer to access the London market rather than the French one. We want our shares to be easily available on both stock exchanges,” he said.

“It will also be easier to have a unique trading platform with Eurotunnel being traded on NYSE Euronext's single order book, at a single price (in euros),” he said.

He hoped the move would increase the liquidity of trading in the company’s shares in London.

“The volume of shares traded in London stock market is 10,000 shares a day versus 2 million shares traded in the Paris Stock Exchange,” he said. “Shareholders, whether French or British, need more volume and liquidity to be able to trade their shares as they want.”

NYX London first announced plans for a London market – intended to challenge the London Stock Exchange as a venue for international company listings – in late 2010 but until now failed to win any listings.

“Attracting the first listing to a new market is something that always takes time,” said Lefèvre.